| Thu 19 Feb 2004, 15:42 | | Assmang results for the 6 months to 31 Dec 03 |
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Assmang Limited - Group financial results for the half-year ended 31 December
2003
Assmang Limited
(Incorporated in the Republic of South Africa)
(Registration number 1935/007343/06)
Share code: ASG ISIN: ZAE000030789
("the Company" or"the Group")
Group financial results for the half-year ended 31 December 2003
SALIENT FEATURES:
* Increased sales volumes for all products
* Headline earnings decreased by 97 per cent to R4 million due to stronger
Rand/US Dollar exchange rate.
GROUP BALANCE SHEET
(Unaudited) (Audited)
at 31 December at 30 June
2003 2002 2003
R"000 R"000 R"000
ASSETS
Non-current assets
Fixed assets 2 199 587 1 949 355 2 072 198
Deferred tax assets 9 797 15 466 12 006
Environmental rehabilitation trust fund 13 069 10 385 13 068
Current assets
Inventories 965 947 894 823 829 772
Trade and other receivables 652 430 620 201 696 480
Taxation 20 402 - -
Deposits and cash 5 894 7 769 3 162
Total assets 3 867 126 3 497 999 3 626 686
EQUITY AND LIABILITIES
Total shareholders" interest 2 274 866 2 239 899 2 288 515
Non-current liabilities
Long-term borrowings - 62 3
Deferred tax liabilities 472 833 414 319 447 768
Long-term provisions 35 709 33 378 35 845
Current liabilities
Trade and other payables 343 576 136 413 310 004
Overdrafts and short-term borrowings 740 142 656 213 524 036
Taxation - 17 715 20 515
Total equity and liabilities 3 867 126 3 497 999 3 626 686
GROUP INCOME STATEMENT
(Audited)
(Unaudited) Year
Half-year ended ended
31 December 30 June
2003 2002 2003
R"000 R"000 R"000
Turnover 1 332 706 1 351 235 2 904 483
Net operating profit before depreciation 132 773 326 891 530 684
Depreciation 80 709 68 104 141 380
Operating profit 52 064 258 787 389 304
Interest received 950 1 196 1 306
Finance costs 34 064 42 069 56 883
Profit before taxation and
State"s share of profit 18 950 217 914 333 727
Taxation and State"s share of profit 14 858 80 432 129 888
Earnings 4 092 137 482 203 839
Determination of headline earnings
Earnings 4 092 137 482 203 839
Profit/(loss) on disposal of assets 134 (172) 22
Headline earnings 3 958 137 654 203 817
Number of ordinary shares in issue ("000) 3 548 3 548 3 548
Earnings per share (cents)
- Attributable 115 3 875 5 745
- Headline 112 3 880 5 745
Dividends per share (cents) 500 700 1 200
GROUP CASH FLOW STATEMENT
(Audited)
(Unaudited) Year
Half-year ended ended
31 December 30 June
2003 2002 2003
R"000 R"000 R"000
Cash flow from operating activities
Cash generated from operations 73 922 187 398 553 836
Interest received 950 1 196 1 306
Interest paid (34 064) (42 069) (56 883)
Dividends paid (17 741) (24 837) (42 578)
Taxation paid (28 473) (67 732) (77 480)
Net cash (out)/in-flow from
operating activities (5 406) 53 956 378 201
Cash flow from investing activities
Additions to fixed assets to
maintain operations (208 099) (131 048) (338 116)
Additions to fixed assets to
expand operations - (8 578) -
Disposal of mineral rights
and other assets 134 (172) 1 702
Net cash out-flow from
investing activities (207 965) (139 798) (336 414)
Cash flow from financing activities
Long-term borrowings repaid (3) (630) (49)
Increase/(decrease) in
short-term borrowings 216 106 79 364 (53 453)
Net cash in/(out)-flow from
financing activities 216 103 78 734 (53 502)
Net increase/(decrease)
in cash and cash equivalents 2 732 (7 108) (11 715)
Cash and cash equivalents
at beginning of period 3 162 14 877 14 877
Cash and cash equivalents
at end of period 5 894 7 769 3 162
GROUP STATEMENT OF CHANGES IN SHAREHOLDERS" EQUITY
Stated Retained
capital earnings Total
R"000 R"000 R"000
Balance at beginning of period (audited) 13 385 2 275 130 2 288 515
Earnings for the period 4 092 4 092
Ordinary dividends paid (17 741) (17 741)
Balance at end of period (unaudited) 13 385 2 261 481 2 274 866
COMMENT
Results
Despite increased sales volumes for all products, earnings were substantially
lower than the corresponding period of the previous year as cautioned in the
trading update issued on 13 November 2003.
Assmang"s products are priced principally in US dollars and the period under
review has seen a significant strengthening of the rand with the average
exchange rate realised on the Group"s export proceeds being R6,98 to the United
States dollar against R10,02 in the equivalent previous period. In the
competitive markets in which the Group"s products trade, and like most other
resource companies in South Africa at present, a change of this extent seriously
affects profitability and was sufficient to completely negate the higher unit
prices achieved in US dollars for ferro-alloys and the strong sales performances
achieved in the Group"s products as summarised in the table below:
Six months ended
31 December
2003 2002 Volume
(tons) (tons) increase
Manganese ore 662 867 409 443 62%
Iron ore 2 493 824 2 259 433 10%
Manganese alloys 100 489 96 908 4%
Charge chrome 126 860 103 641 22%
As a result the Group"s revenue for the half-year ended 31 December 2003
declined by 1,4 percent to R1 332,7 million (2002: R1 351,2 million).
Attributable earnings decreased by 97,0 per cent to R4,1 million (2002: R137,7
million), equivalent to R1,15 per share (2002: R38,75 per share). The tax charge
for the period of R14,9 million is high in relation to profit before tax due to
charges for State"s share of profit on the manganese mining operations and
Secondary Tax on Companies.
Major capital projects
The Company continued its significant capital programme, spending R208,1 million
(2002: R139,6 million) during the period under review, of which R77,0 million
was spent on its new shaft complex at the Nchwaning manganese mine.
Production from this shaft is expected to commence during May 2004 and capital
expenditure will be substantially completed by December 2004. Planned production
levels from the existing and new Nchwaning shaft complex are adequate to satisfy
customer demand within current logistical constraints.
The cost of the development of the shaft complex is estimated at R690 million.
Current additional enhancement projects include the completion of the Nchwaning
shaft complex, the construction of an underground mine at Dwarsrivier Chrome
Mine to replace the existing opencast mine and the development of additional
reserves at the iron ore division.
Capital commitments
(Unaudited) (Audited)
At 31 December At 30 June
2003 2002 2003
R"000 R"000 R"000
Commitments for future capital expenditure
- contracted for 145 614 467 342 109 323
- authorised, but not contracted for 238 447 291 179 233 014
384 061 758 521 342 337
Borrowings
Short-term borrowings at 31 December 2003 increased by R216,1 million to R740,1
million, compared with R524,0 million at the end of the 30 June 2003 financial
year.
Outlook for the next six months
Demand for the Group"s products remains buoyant and tonnages over the balance of
the financial year are expected to approximate those of the period under review.
US dollar prices for the Group"s products are also expected to be higher which,
given a stable US dollar exchange rate, could cause earnings to increase in the
second half. Shareholders are however reminded that earnings performance will
continue to be largely dependant upon the Rand/US dollar exchange rate and, to a
lesser extent, upon cost savings achieved by the operating divisions.
Dividends
The results include a final dividend of R5,00 per share with regard to the
previous financial year, which was paid on 22 September 2003.
Given the uncertainties surrounding the level of earnings over the remainder of
the financial year and consequently, the Group"s cash flow situation, it is
proposed that a reduced interim dividend of R2,50 per share (2002 : R5,00 per
share) be declared before the end of March 2004.
Accounting policies
The results have been prepared in accordance with accounting standards issued by
the International Accounting Standards Board and The South African Institute of
Chartered Accountants. The accounting standards are consistent with those used
previously.
Anglovaal Mining Limited
Secretaries
per: A Jepson
Registered office: 56 Main Street, Johannesburg, 2001
19 February 2004
Directors: Desmond Sacco (Chairman), R. P. Menell (Deputy Chairman), R. J.
Carpenter, C. J. Cory, P. C. Crous, D. N. Campbell, B. R. Broekman,
J. C. Steenkamp.
Alternate directors: B. J. Funston, A. D. Stalker*, J. W. Lewis*, G. S.
Potgieter, G. C. Butler*, M. J. N. Uys, F. H. Kalp, A. McAdam*. *British
Company secretary: Anglovaal Mining Limited
Date: 19/02/2004 03:30:07 PM Produced by the JSE SENS Department
